Case Analysis: USTech

Case Study # 104431

Business > Applied Operations
Business > Companies
Business > International
Business > Management

Looks at a case analysis to determine if USTech, a large, global consumer electronics product (CEP) manufacturer, should eliminate the distribution middleman.

990 words () | 1 source | MLA | 2008 United States

Paper Summary:

This paper relates that USTech is considering two new strategies. The author explains that the first strategic consideration is to further reduce operating costs and improve its profit margins by removing its original design manufacturer from the cost equation. The paper then explains that the second strategic option is to enter the Chinese market rather than simply utilizing its outsourcing manufacturers. In addition, the paper outlines the recommended USTech's strategic action plan, which should be implemented to shift its contract manufacturing away from TaiSource and over to a mainland Chinese manufacturer as well as to accomplish an effective market entry strategy to allow the company to enter the Chinese market itself.

From the Paper:

"Clearly, USTech's willingness to risk its relationship by hiring away one of TaiSource's critical employees demonstrated to TaiSource that the relationship that it had developed with USTech was not one based on trust and therefore the long-term viability of the contracting arrangement was not realistic. Yet, while Greg is beginning to sense the severity of the damage that USTech has done to its relationship with TaiSource both he and the company is completely at a loss about how to continue when their choices are obvious to all who are familiar with the cultural character of the Chinese and, specifically, the Taiwanese culture."